Product sophistication and spillovers from foreign direct investment

Eck, Katharina and Huber, Stephan (2016) Product sophistication and spillovers from foreign direct investment. CANADIAN JOURNAL OF ECONOMICS-REVUE CANADIENNE D ECONOMIQUE, 49 (4). pp. 1658-1684. ISSN 0008-4085, 1540-5982

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Abstract

Foreign direct investment (FDI) in developing countries is often associated with higher economic growth due to knowledge and technology spillovers to local firms. One way that FDI speeds up growth is by facilitating the manufacturing of more sophisticated products by local firms. So far, there is a lack of firm-level evidence how the presence of multinational firms affects the product sophistication of firms in a developing country. The aim of this paper is to fill this gap. We compile an extensive firm-product-level data set of Indian manufacturing firms, which we complement with information on product sophistication and spillovers from FDI. We then explore different channels through which spillovers from multinationals to local Indian firms foster the manufacturing of sophisticated products. We find evidence that spillovers through supplier linkages strongly increase the manufacturing of sophisticated products in India.

Item Type: Article
Uncontrolled Keywords: DOMESTIC FIRMS; ECONOMIC-DEVELOPMENT; MULTINATIONAL FIRMS; TECHNOLOGY-TRANSFER; BACKWARD LINKAGES; GROWTH EVIDENCE; TRADE; INDIA; COMPETITION; INPUTS;
Subjects: 300 Social sciences > 330 Economics
Divisions: Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Empirische Makroökonomie und Regionalökonomie (Prof. Dr. Joachim Möller)
Business, Economics and Information Systems > Institut für Immobilienenwirtschaft / IRE|BS > Lehrstuhl für Empirische Makroökonomie und Regionalökonomie (Prof. Dr. Joachim Möller)
Depositing User: Dr. Gernot Deinzer
Date Deposited: 12 Apr 2019 12:07
Last Modified: 12 Apr 2019 12:07
URI: https://pred.uni-regensburg.de/id/eprint/3979

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